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Grants HHS the authority to block or modify rate increases that are excessive, unjustified or unfairly discriminatory

Mar062013

Washington—Senator Dianne Feinstein (D-Calif.) today introduced the Health Insurance Rate Review Act of 2013 to allow the Secretary of Health and Human Services to block or modify unreasonable health insurance rate increases in states where insurance regulators lack the authority to do so. Rep. Jan Schakowsky (D-Ill.) introduced companion legislation in the House of Representatives.

Earlier this year, the California Insurance Commissioner found a rate increase by Anthem Blue Cross to be unreasonable, but lacked the authority to stop it. The increase affected nearly 250,000 policyholders whose rates increased by up to 10.6 percent; when combined with previous increases, the average rate hike for those policyholders over two years reached 19.5 percent.

“In California and 14 other states, consumers continue to face unreasonable health insurance rate hikes,” said Senator Feinstein. “Regulators in these states lack the authority to block or modify these unjustified increases in the individual and small group markets, even when they are found to be excessive.

“Candidly, this is unacceptable. I tried to include regulatory rate review in the health reform law that passed Congress in 2010, but without further legislative action, consumers will continue to be at the mercy of health insurance companies as their premiums grow beyond the rate of medical inflation.”

Feinstein added, “The Health Insurance Rate Review Act of 2013 is a common sense solution to the problem. The bill establishes a federal fallback rate review process that grants the Secretary of Health and Human Services the authority to block or modify rate increases that are excessive, unjustified or unfairly discriminatory when the state insurance commissioner does not have or use the authority to do so.”

Rep. Schakowsky said: “When individuals, families and small business owners purchase health insurance, they deserve to know that the premiums they pay are reasonable. The evidence shows that health consumers benefit if they live in states where insurance regulators have and use the authority to prevent unreasonable price hikes. Unfortunately, in too many states, like Illinois, that authority is missing. This bill is a common-sense solution that gives the Secretary of Health and Human Services backup authority to prevent excessive premiums because everyone – no matter where they live or do business – deserves reasonable insurance rates.”